Gold is looking to push higher towards $1835 and $1865 levels in the next few weeks before finding resistance again. The yellow metal might have carved a meaningful higher low around $1721 on September 29 and has turned higher thereafter.
Gold has carved a classic Elliott Wave pattern at two different degrees since $1677 lows. The metal has produced a 5-3 pattern marked as (a) and (b) around $1834 and $1721 respectively. Furthermore it has carved wave I and ii around $1770 and $1745 levels.
It could be seen as a classic example of the fractal nature of markets. If the above is correct, the next move should be 5 waves, which is Wave (c) at a higher degree, and terminate above $1834 mark. Also, prices should stay above $1721, to keep the above structure intact.
Once the above (a)-(b)-(c) corrective zigzag structure is complete, Gold is expected to turn lower towards $1450 levels, to continue its potential diagonal structure at one larger degree. For now, immediate resistance is seen around $1786 mark and a push higher would bring bulls back in control.
Traders might be preparing to initiate fresh long positions around $1740-55 zone, with potential risk below $1721 and target above $1834 levels respectively.
The Profinacademy.com Team
Gold prices have reversed sharply toward $1780 levels in the past few trading sessions losing over 100 points. Bulls have managed to hold prices above a critical support around $1758 mark until now.
The US dollar index rallied through 96.88 levels on Wednesday, a bit higher than the expected 96.65 mark. The index has now tested fibonacci 0.50 retracement of the larger degree Wave (1) as labelled on the daily chart here.
EURUSD has carved yet another shallow low on Tuesday around 1.1226 before finding mild bids. The downside remains limited from here and the single currency pair might test 1.1200-10 mark before resuming higher again.